Hongkong Land Holdings Limited (SGX:H78) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a pretty negative result overall, with revenues of US$1.8b missing analyst predictions by 6.8%. Worse, the business reported a statutory loss of US$0.26 per share, a substantial decline on analyst expectations of a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Hongkong Land Holdings' eleven analysts are now forecasting revenues of US$2.21b in 2024. This would be a decent 20% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Hongkong Land Holdings forecast to report a statutory profit of US$0.33 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.15b and earnings per share (EPS) of US$0.36 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a decent to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

The analysts also cut Hongkong Land Holdings' price target 5.2% to US$3.71, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Hongkong Land Holdings, with the most bullish analyst valuing it at US$6.10 and the most bearish at US$2.85 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Hongkong Land Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 20% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.4% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 1.6% per year. Not only are Hongkong Land Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hongkong Land Holdings' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Hongkong Land Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hongkong Land Holdings analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Hongkong Land Holdings has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.